Tuesday, 30 November 2010

A few days ago, I referred to the Irish Bail-out as Another Domino Falling. In that post, I set out why the idea, that the Irish Bail-out would stem the contagion to other EU peripheral economies, was a vain hope. Once Ireland was bailed-out, traders would necessarily turn to the next country whose ability to repay its debt looked shaky. That everyone agreed was Portugal. The terms of the Irish bail-out show why this is. The interest to be paid by Ireland is a not inconsiderable 5.8%, but the yield on Portuguese debt has already risen way above that. It would be cheaper for Portugal to accept a bail-out simply to cut its interest payments. Nouriel Roubini has already argued that Portugal should take such a course of action. What has been surprising, though, is the speed with which the markets have lined up additional dominoes to fall, even before attention has fully fallen on Portugal. Almost straight away, rumours began to circulate that Belgium would also need a bail-out, and almost by-passing Portugal, attention passed straight to Spain, and now there are murmurings of the need for an Italian bail-out, and even some suggestions that down the line France could come into focus.

Opinion is divided on what is and what is not possible. Roubini has said that because Portugal only accounts for around 2% of EU GDP – whereas Germany accounts for more than 30% - it could be easily dealt with, but he says that Spain is too big to bail-out, whilst also saying it is too big to fail. On the other hand, Jim O'Neill, of Goldman Sachs, says that if Germany does not want the Euro to fail, and it doesn't he says, it will have to find a way of bailing-out Spain, and perhaps others. It is becoming clear, as I suggested earlier in the year, that the Bank Stress tests were a sham. They failed to deal with the one question they needed to address – how resilient were these banks in the face of a sovereign default. In fact, what we have now is the potential not just for one sovereign default, but of multiple defaults, or at least partial defaults as debt is restructured. It is now becoming clear that both Portuguese and Spanish Banks need huge recapitalisation, exactly what led to the problem for Ireland. If they go down then German Banks who have large positions with these banks will also be badly affected. At the moment Germany is booming, it is in German interests to resolve this crisis not allow it to escalate, and threaten bringing its own economy down with it.

What is interesting is that on the BBC News Channel's Business slot today, David Buick, of City Firm BGC Partners, spelled out the real problem. Buick can normally be relied upon to give a response that follows closely the Tory Party line. However, today his comments were revealing. The problem in Ireland, he said, was that they were being asked to pay 5.8% on this bail-out, which is hardly a low rate of interest, compared with the 2% or so that Germany pays. But, he said, at the same time, its economy, which was already in trouble, is being sent further into recession as a direct result of the austerity measures it has already taken, let alone is being asked to adopt. As a result, the chances of it being able to generate the economic growth, which would enable it to pay the interest on that debt is remote. The result is that its position is likely to worsen, and that is why the yield on its Bonds is continuing to rise. But, that argument applies across Europe, apart from Germany, and one or two other economies, not including the UK.

What we have is, in reality not an economic crisis, but a political crisis. In part, what we have is Germany using its position to force a restructuring of Europe. If individual EU countries agree to submit to the idea of a more centralised, Federal Europe, with centralised decision making over Budgets, then the problem can be resolved over night. Germany can bail-out those economies requiring immediate support in return for a planned programme of growth, and fiscal responsibility i.e. cutting deficits over a given period, and the ECB can be imposed upon to simply print money to monetise the existing debt, thereby essentially forcing Bond holders to take a haircut as a result of being repaid in devalued currency, but which they are likely to accept as preferable to actual defaults or rescheduling, and which they will in any case recoup as yields on longer dated paper being issued will rise – though still being nowhere near the rates peripheral economies are currently facing. It would also stabilise the Euro overnight, at a more competitive level against the dollar. But, the reason it is a political crisis is precisely because there is, and would be resistance from various groups within the respective nation states to the idea of giving up “sovereignty” and the establishment of a Federal Europe. One by one individual states are being forced to accept that there is no real alternative to such a solution. Britain, might think it can escape that logic, but ultimately, and perhaps in the not too distant future, it will face the same question. It will be a matter of in or out of such a Europe. If it chooses to be out, then the consequences would be severe.

But, as I've pointed out before, none of this should lead us to lose sight of the wider picture. An article in the Weekly Worker last week, about Ireland, located it within the context of a global crisis of Capitalism. Yet, the reality is that no such crisis exists! China is growing at 10% p.a., latest data out from India shows it growing at more than 8%. Latest data also suggests that the fiscal stimulus in the US, alongside the Quantitative Easing, is beginning to feed through. Figures on growth, and on jobs have begun to strengthen. Moreover, an article in the FT at the weekend shows the danger of being too hung up on the old world economies. We used to talk about the Asian Tiger economies, as emerging markets, but many of these today now have to be described as having emerged. A few years ago, Jim O'Neill coined the phrase BRIC to refer to Brazil, Russia, India and China. Now analysts are looking for similar terms to cover the new emerging economies, variously described as the Next 11, or 15. These economies include Vietnam, Turkey, Egypt, Colombia and others in Africa. Some of these economies are growing even faster than China. One US commentator on CNBC earlier today spoke of the danger for Europe, as its austerity measures result in stagnant growth, whilst the US increasingly turns its eyes towards developing trading links with these new and rapidly developing economies, many of whom China already has built bilateral links with.

The reality is that European leaders are dithering. The US already has a centralised Federal State. It takes decisions accordingly. China has a similar set-up, with the further benefit of a still largely planned economy, or at least directed economy. The smaller economies have the advantage of being new and dynamic, and so do not currently face the problems that the large economies face. In Europe, apart from Germany, the national economies are old and decrepit. They have not restructured during the long-wave downswing to meet the challenges of the new Boom. They could still do so, as the US will need to do, provided they took decisive action to establish a centralised Federal State. If they do not, and fail to then take the necessary measures, then the problems that David Buick outlined in relation to Ireland will spread to much of the EU economy, including the UK.

Sunday, 28 November 2010

On every occasion, the Liberal-Tories response, to attacks on their Cuts policies, is to come out with the same whining about the situation they were left. As the snow falls, is it too much to hope that we might hear the Last of the Summer Whine, from Campo, Clegg and Foggy Osborne, pictured below.

Saturday, 27 November 2010

This is a stomper from the Flaming Emeralds, which dates back to the days of numerous All Dayers and Nighters in the late 70's, but now reminds me most of Nighters at Keele University during the mid 90's. I'm including vocal and instrumental versions.

Friday, 26 November 2010

If we piece these ideas of Marx together, we can see what his approach to Education, including Higher Education would be today. Firstly, Marx would not raise the argument that access to Education, including Higher Education, should be restricted to those only who merit it, by their intellectual advantages i.e. rationing supply by “natural privilege” rather than price. But, nor would Marx have been arguing for raising the demand for “Free”, Universal, Higher Education for all, because it is clear, not only that Capitalism cannot meet such a demand, but under current conditions it would not in any case be “free” at all, nor would it be equal for all. That is clear from his statements above where even in respect of Elementary Education, he argues that even in a Socialist Society the Socialist principle, and “general law of nature, viz.: to work in order to be able to eat, and work not only with the brain but with the hands too” would apply.

We also know that the way Marx believed that payment for education should be achieved was that it should be paid by employers. “Proceeding from this standpoint, we say that no parent and no employer ought to be allowed to use juvenile labour, except when combined with education” and “The costs of the technological a schools ought to be partly met by the sale of their products.” But, also we know that Marx believed that the combination of Education with paid employment was beneficial for workers, and progressive. “The combination of paid productive labour, mental education bodily exercise and polytechnic training, will raise the working class far above the level of the higher and middle classes.”

The other advantage of such an approach to Education is that it breaks down the separation of Education as an aspect of life removed from everything else, and so ends what tends to be a sort of transmission belt within Capitalist society, with those destined to be the academics carried along by it, and the rest facing an uphill battle to get back on it. There are some changes that have made this easier such as the Open University, but OU, students face the problem of having to cope with their studies in addition to the time devoted to their work, rather than the two things being combined. Such an approach might also have the benefit of moving the emphasis of education away from being merely a means of obtaining qualifications for the purpose of obtaining a higher paid job. It might also have the added benefit of injecting into the world of academia, an awareness of the outside world, as well as bringing the world of organised labour into the classroom.

Trades Unions could, here and now, make headway into negotiating with employers agreements to cover such an extension of educational provision for all workers, and a demand that such a right be enshrined in law is indeed, quite compatible with the capacity of present-day Capitalist society. But, also as I have suggested elsewhere, the current campaigns being conduced across campuses throughout the country also immediately open up other possibilities. Lecturers, and other University workers could alongside Students Unions, agree to throw open existing lectures and tutorials for all workers who wish to attend. The costs of the University already exist, the wages of lecturers are already being paid, there is in reality no additional cost to providing such a facility. It would mean workers and students refusing to accept the limits of Capitalist property, and exercising immediate control over both facilities and over the work process. This was, in fact, the kind of action that workers and lecturers in the Plebs League organised prior to establishing the National Labour Colleges.

But, the Plebs League also provides us with other lessons. If we really want education to meet our needs then ultimately, we have to bring its provision under our own direct ownership and control. The example of the Co-operative University established by the Mondragon Co-ops shows exactly what workers are capable of achieving when they set their minds to such a task. The chain of Reading Rooms, Libraries, and Schools established by the British Co-ops during the 19th century also demonstrates that even under such adverse conditions workers are capable of the kind of “self-government”, of which Marx refers.

There is also another important aspect of this. Marx never tired of pointing out that Capitalism fulfilled a revolutionary role in many different ways. One of those ways was that it swept aside the patriarchal relations of Feudal Society under which the Lord of the Manor was seen as being a benevolent provider. Of course, that was nonsense, because the other side of that benevolence was that peasants provided the lord of the manor with the resources to provide that benevolence, and the price paid by those who received it, was the most odious subservience and slavery. The breaking of those ties, the fact that Capitalism forced workers to organise and to be self-sufficient, via their collective action was one of those aspects of Capitalism that prepared the working-class for becoming the new ruling class. That is one reason that in the program of the French Socialists he raised the demand

“Prohibition of all interference by employers in the administration of workers' friendly societies, provident societies, etc., which are returned to the exclusive control of the workers;”

The bosses quickly recognised the danger of the growth of this “self-government” by workers, which is what led them to establish their own State version of the workers provision, and to force workers to pay into them. What the establishment of the Welfare State did was to undermine that workers' self-government, which Marx saw as fundamental to the development of the working-class as a revolutionary class, as its preparation to become the new rulers. The extent to which he believed that was again set out in his Critique of the Gotha Programme. Denouncing the idea put forward by the Lassalleans that the State could fulfil this function for the workers, and that socialists should demand that it did so Marx writes,

“Instead of arising from the revolutionary process of transformation of society, the "socialist organization of the total labor" "arises" from the "state aid" that the state gives to the producers' co-operative societies and which the state, not the workers, "calls into being". It is worthy of Lassalle's imagination that with state loans one can build a new society just as well as a new railway! From the remnants of a sense of shame, "state aid" has been put -- under the democratic control of the "toiling people"...

But what does "control by the rule of the people of the toiling people" mean? And particularly in the case of a toiling people which, through these demands that it puts to the state, expresses its full consciousness that it neither rules nor is ripe for ruling!..

That the workers desire to establish the conditions for co-operative production on a social scale, and first of all on a national scale, in their own country, only means that they are working to revolutionize the present conditions of production, and it has nothing in common with the foundation of co-operative societies with state aid. But as far as the present co-operative societies are concerned, they are of value only insofar as they are the independent creations of the workers and not protégés either of the governments or of the bourgeois.”

What runs through Marx's writings that would make him completely hostile to the ideas of Welfarism, a Welfarism that reintroduces that Feudalistic, paternalism, and turns large sections of the population into serfs condemned to a dependent relation upon it, is precisely this need for workers to raise themselves up, to build their own dignity, and strength, through developing their own independence from the bourgeoisie and their State. But, also what runs through his ideas is that the last thing that we need in trying to create a working-class capable of transforming society by its own actions, is one which looks to some other institution to act on its behalf. The last thing we need is to instil in workers the idea that it is possible to get something for nothing, because that would mean encouraging workers to look to others to take responsibility for society, would encourage workers to assume that in such a society someone else would provide for their needs, or that free-riding was acceptable. Nor as Marx sets out in what he says about the limitations of what is possible in that lower stage of Communist Society, should we lead workers to believe that everything is possible, that simply getting rid of Capitalism means that no choices have to be made about how resources should be allocated.

What we need is not a series of demands about how existing bourgeois education should be provided, but a program to move beyond bourgeois education, just as we do not need demands setting out how to improve existing bourgeois production, but demands that move beyond bourgeois production, and set against it, the development of worker-owned, Co-operative property and production.

Does that mean that Marx would have opposed the current student demonstrations that do call for improvements to existing bourgeois education, that raise demands that are either inequitable or unachievable under Capitalism? Of course, not. Marx wanted workers to go beyond simply struggling for higher wages or better conditions. He wanted them to set up their own Co-operatives as an alternative to Capitalist firms, wanted them to create their own Party to struggle for political power so that those Co-operatives could be supported against the attacks of Capital upon them. But, he recognised the need to support workers where they were, in order to win their ear, and persuade them of the need to move beyond those immediate struggles. In Value, Price and Profit, he sets out at length the reasons why such Trades Union struggles were doomed to defeat, why they could never advance the workers beyond the level of what was in any case the Value of Labour Power established by the laws of Supply and Demand. But, he also wrote,

“These few hints will suffice to show that the very development of modern industry must progressively turn the scale in favour of the capitalist against the working man, and that consequently the general tendency of capitalistic production is not to raise, but to sink the average standard of wages, or to push the value of labour more or less to its minimum limit. Such being the tendency of things in this system, is this saying that the working class ought to renounce their resistance against the encroachments of capital, and abandon their attempts at making the best of the occasional chances for their temporary improvement? If they did, they would be degraded to one level mass of broken wretches past salvation. I think I have shown that their struggles for the standard of wages are incidents inseparable from the whole wages system, that in 99 cases out of 100 their efforts at raising wages are only efforts at maintaining the given value of labour, and that the necessity of debating their price with the capitalist is inherent to their condition of having to sell themselves as commodities. By cowardly giving way in their everyday conflict with capital, they would certainly disqualify themselves for the initiating of any larger movement.”

“Hence, nothing prevents us from making criticism of politics, participation in politics, and therefore real struggles, the starting point of our criticism, and from identifying our criticism with them. In that case we do not confront the world in a doctrinaire way with a new principle: Here is the truth, kneel down before it! We develop new principles for the world out of the world’s own principles. We do not say to the world: Cease your struggles, they are foolish; we will give you the true slogan of struggle. We merely show the world what it is really fighting for, and consciousness is something that it has to acquire, even if it does not want to.”

Finally, I began by relating my own experience of having to go through the 11 Plus, which at that time determined who was a winner and who a loser, who merited society lavishing more educational resources upon them. I should also mention that in that process I was a loser. I failed my 11 Plus. Fortunately, the village school I went to during the time I was there embarked on an experiment to allow some students to stay on to do 'O' levels. It was perhaps as well, because I had absolutely no aptitude for woodwork, or anything else that required manual dexterity. Obtaining a handful of 'O' Levels enabled me to get an office job, and probably the modicum of confidence to be prepared to do additional study later. In fact, it was only after I was married, and had been working for about 5 years or so, that I undertook Day Release study from work. And, in fact, I found that rather than being a loser, I was actually quite good at it. Within 2 years I not only obtained a qualification in Business Studies, but within a few months on the back of additional self-study I obtained 'O' levels in Economics, Accounting, and British Constitution, all pretty much with perfect scores. The next year I obtained, 'A' levels in Economics, Accounting and Law, passing the latter with just 6 months study. It was on the back of that that I went to University, and during all the time I was there, I maintained my relationship with my union Branch, attending every meeting, writing material for its regular Bulletin, and continuing throughout as one of its representative to the local TUC. I can recommend from this practical experience such a course of action.

If we are to make the case for free access to Higher Education or any other form of provision then it can only be on the basis of access for all, not on the basis of rationing that access on the basis of some other criteria that inevitably favours one section of society over another. But, the question then arises about the practicability of such a demand. In the Critique of the Gotha Programme, Marx makes the point that even in a Socialist Society – that is a society two stages away from where we are now (society will have to overcome Capitalist Society and pass through a transitional phase of the Dictatorship of the Proletariat before even arriving at Socialism), and one stage below Communism – productive capacity will not have advanced sufficiently to make everything available in such abundance that these kinds of choices and dilemmas will have been eradicated. He says,

“ What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges. Accordingly, the individual producer receives back from society -- after the deductions have been made -- exactly what he gives to it. What he has given to it is his individual quantum of labor. For example, the social working day consists of the sum of the individual hours of work; the individual labor time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another.

Here, obviously, the same principle prevails as that which regulates the exchange of commodities, as far as this is exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except his labor, and because, on the other hand, nothing can pass to the ownership of individuals, except individual means of consumption. But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labor in one form is exchanged for an equal amount of labor in another form.

Hence, equal right here is still in principle -- bourgeois right, although principle and practice are no longer at loggerheads, while the exchange of equivalents in commodity exchange exists only on the average and not in the individual case. In spite of this advance, this equal right is still constantly stigmatized by a bourgeois limitation. The right of the producers is proportional to the labor they supply; the equality consists in the fact that measurement is made with an equal standard, labor.

But one man is superior to another physically, or mentally, and supplies more labor in the same time, or can labor for a longer time; and labor, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labor. It recognizes no class differences, because everyone is only a worker like everyone else; but it tacitly recognizes unequal individual endowment, and thus productive capacity, as a natural privilege. It is, therefore, a right of inequality, in its content, like every right. Right, by its very nature, can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable only by an equal standard insofar as they are brought under an equal point of view, are taken from one definite side only -- for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labor, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal.

But these defects are inevitable in the first phase of communist society as it is when it has just emerged after prolonged birth pangs from capitalist society. Right can never be higher than the economic structure of society and its cultural development conditioned thereby. (emphasis added)

In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly -- only then then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”

The emphasised sentence is most significant here. In criticising the demand for Equal Elementary Education raised by the Lassalleans, Marx, wrote,

""Equal elementary education"? What idea lies behind these words? Is it believed that in present-day society (and it is only with this one has to deal) education can be equal for all classes? Or is it demanded that the upper classes also shall be compulsorily reduced to the modicum of education — the elementary school — that alone is compatible with the economic conditions not only of the wage-workers but of the peasants as well?”

Today, with the general and significant development of the productive forces, and to meet its needs, we take for granted that Elementary Education should be free for all, and that this is quite compatible with Capitalism. Yet, in reality, even now, and even in respect of Elementary Education, Marx's point holds. Can we really say that this Elementary Education is, in any real sense, equal. Do the kids in the run down inner city areas REALLY get an equal, even Elementary, education with the kids living in the leafy suburbs of Esher? And, if that applies to Elementary Education, how much more does it apply to Higher Education?

The idea of free, equal access to Higher Education is one to which we should aspire, but just as Marx makes clear here in relation to Elementary Education, it is one that is simply incompatible with Capitalism. To raise such a demand of Capitalism is, therefore, to raise a demand that sows illusions in the capability of Capitalism and of its State, or else amounts effectively to a demand for Socialism Now, or else are to use Marx's phrase nothing more than revolutionary phrase-mongering. Marx was highly critical of such an approach. Together with the French Socialist Guesde, Marx and Engels wrote the Program of the French Socialist Party, much of which echoes the ideas Marx had outlined in the Program of the First International. However, after the programme was published Marx came into disagreement with Guesde and his supporters over the nature of the programme. Rather like many of today's Trotskyists who raise demands against the State, which they know are not achievable, but which they believe, for that very reason will lead the workers to shed their illusions in that State – various versions of “We should not let the State off the hook” - Guesde argued, that raising impossible demands would,

“free the proletariat of its last reformist illusions and convince it of the impossibility of avoiding a workers ’89.”

It was in responding to this approach that Marx made his famous remark that, if their politics represented Marxism,

“ce qu'il y a de certain c'est que moi, je ne suis pas Marxiste” (“what is certain is that I myself am not a Marxist”).

Instead of limiting ourselves to raising such demands of Capital, we should follow Marx's example of pointing out that Capitalism simply is not capable of meeting such needs. And we should follow his example, of, therefore, dealing with these questions by other means that are capable of being implemented now, and which at the same time strengthen the position of workers as against Capital and its State. Looking at Marx's views are again instructive here, and stand in contrast to the Liberal views that have become absorbed into the consciousness of workers and socialists over the last century. Take the idea of the form of Education. We take it for granted that Education is essentially something to be engaged in as a separate activity. But, logically this is a very strange idea. In most societies, the process of learning has not been a separate activity from the rest of life, but merely an integral part of it. The Liberal view has dominated much of the Left's attitude to such questions when looking at things such as child labour in poor countries. The picture is painted as though the alternative facing children in such countries is the same as that in developed economies i.e. that if children were not working they would, and should be in school. In reality, of course, for most of these kids, if they were not working, they would not be in school, but would be begging on the streets, or employed in prostitution etc. Marx had no truck with such Liberal, Moralistic and Utopian notions. In the Critique of the Gotha Programme, he said of its demand for the abolition of child labour,

“A general prohibition of child labor is incompatible with the existence of large-scale industry and hence an empty, pious wish. Its realization -- if it were possible -- would be reactionary, since, with a strict regulation of the working time according to the different age groups and other safety measures for the protection of children, an early combination of productive labor with education is one of the most potent means for the transformation of present-day society.”

In Section 4 of the program of the First International, Marx sets out how the question could be addressed within current conditions.

“We consider the tendency of modern industry to make children and juvenile persons of both sexes co-operate in the great work of social production, as a progressive, sound and legitimate tendency, although under capital it was distorted into an abomination. In a rational state of society every child whatever, from the age of 9 years, ought to become a productive labourer in the same way that no able-bodied adult person ought to be exempted from the general law of nature, viz.: to work in order to be able to eat, and work not only with the brain but with the hands too.

However, for the present, we have only to deal with the children and young persons of both sexes divided into three classes, to be treated differently [a]; the first class to range from 9 to 12; the second, from 13 to 15 years; and the third, to comprise the ages of 16 and 17 years. We propose that the employment of the first class in any workshop or housework be legally restricted to two; that of the second, to four; and that of the third, to six hours. For the third class, there must be a break of at least one hour for meals or relaxation.

It may be desirable to begin elementary school instruction before the age of 9 years; but we deal here only with the most indispensable antidotes against the tendencies of a social system which degrades the working man into a mere instrument for the accumulation of capital, and transforms parents by their necessities into slave-holders, sellers of their own children. The right of children and juvenile persons must be vindicated. They are unable to act for themselves. It is, therefore, the duty of society to act on their behalf.

If the middle and higher classes neglect their duties toward their offspring, it is their own fault. Sharing the privileges of these classes, the child is condemned to suffer from their prejudices.

The case of the working class stands quite different. The working man is no free agent. In too many cases, he is even too ignorant to understand the true interest of his child, or the normal conditions of human development. However, the more enlightened part of the working class fully understands that the future of its class, and, therefore, of mankind, altogether depends upon the formation of the rising working generation. They know that, before everything else, the children and juvenile workers must be saved from the crushing effects of the present system. This can only be effected by converting social reason into social force, and, under given circumstances, there exists no other method of doing so, than through general laws, enforced by the power of the state. In enforcing such laws, the working class do not fortify governmental power. On the contrary, they transform that power, now used against them, into their own agency. They effect by a general act what they would vainly attempt by a multitude of isolated individual efforts.

Proceeding from this standpoint, we say that no parent and no employer ought to be allowed to use juvenile labour, except when combined with education.

By education we understand three things.

Firstly: Mental education.

Secondly: Bodily education, such as is given in schools of gymnastics, and by military exercise.

Thirdly: Technological training, which imparts the general principles of all processes of production, and, simultaneously initiates the child and young person in the practical use and handling of the elementary instruments of all trades. [The German text calls this "polytechnical training." -- Ed]

A gradual and progressive course of mental, gymnastic, and technological training ought to correspond to the classification of the juvenile labourers. The costs of the technological a schools ought to be partly met by the sale of their products.

The combination of paid productive labour, mental education bodily exercise and polytechnic training, will raise the working class far above the level of the higher and middle classes.

It is self-understood that the employment of all persons from 9 and to 17 years (inclusively) in nightwork and all health-injuring trades must be strictly prohibited by law.”

Thursday, 25 November 2010

On various student demonstrations, I have seen placards and other material putting forward the argument that access to Higher Education should be based on merit rather than ability to pay. I've heard the same argument being put at various times by people opposing the rise in Tuition Fees. Its a very dangerous argument.

I am old enough to have grown up in a generation where access to “higher” education WAS based on merit. When I was 11, I had to sit my 11 Plus Exam, along with millions of other kids, to decide whether we were part of life's losers or winners, whether we had sufficient merit to deserve the State lavishing more resources on our education than others, and thereby providing us with an even bigger advantage over them than our supposed higher intelligence level already gave us. It determined whether we were to be educated in a Secondary Modern School, which essentially meant you were a failure, and that you'd just be educated up to the minimum level that Capital required for workers who were going to be employed in various unskilled or semi-skilled jobs, or whether you would go to a Technical School, meaning you might have some aptitude to become perhaps a draftsman or other such skilled manual work, or whether you were to go to a Grammar School, in which case you were already one of life's winners, and would thereby merited the benefit of the best teachers, the best schools and equipment, and the general ethos and culture that led inevitably towards either University, Polytechnic, or at least a job somewhere on the lower rungs of management.

Only a few years before those consigned to the Secondary Modern Schools left for the world of work aged 14. For my generation that was raised to 15. Looked at objectively, this actually did mean that those who were already most disadvantaged, and who left school at 15, started to pay taxes, a part of which went to the State paying the wages of the teachers in the Grammar Schools, the Sixth Form Colleges, and the Universities and Polytechnics to whom those who already had the advantage of a higher level of academic achievement had access. From a socialist perspective there really is something wrong with such a state of affairs. It really cannot be right that workers already disadvantaged, pay taxes to support the education of those for whom, and for whatever reason, life has already provided the advantage of a higher level of intelligence, and from which they will, on average, continue to benefit for the rest of their lives, and be able to pass on to their children. As a socialist, I am no more happy about a society divided into classes based upon the possession of intellectual “Capital”, than I am one based on Money Capital. In fact, as Engels sets out in his “The Origin Of The Family, Private Property, and the State”, although it is only when material conditions allow society to be divided into classes, because sufficient can be produced that some can live without the need to work, that Primitive Communist Society broke up, it is almost certainly the fact that some individuals had natural advantages over others, stronger, fitter, more intelligent etc. that played a major part in determining who it was that occupied the positions in society that enabled them to take advantage of that situation, to make themselves the ruling class.

We are less likely to recognise this argument today because the idea of Grammar Schools disappeared in the 1970's with the introduction of Comprehensive Schools, which abolished the idea that access to better education should be based upon merit. Even most Tories today shrink at the idea of them re-introducing Grammar Schools, even if their education proposals attempt to sneak the principle in by the back door. And, of course, although the principle of access to better education based on merit was abolished, in practice it continued. Comprehensives streamed students simply reproducing stratification based on academic achievement within the school, and the middle classes, amongst whom academic achievement was always higher because of the other life advantages they have, were able to simply move into those areas, where needed, where the better schools existed. Even so, we are less likely to recognise this argument today, because generally rising living standards meant that more families could afford to allow their kids to stay on at school, to go to the Sixth Form, and to even go to University or Polytechnic. Even so, only a minority go to University, but it is a much bigger minority than when I went to University in the 1970's, when the number of people in total who had a degree amounted to just 2% of the population. Even that was a larger proportion than in Marx's day, and which prompted him to write in his “Critique of the Gotha Programme”,

“"Universal compulsory school attendance. Free instruction." The former exists even in Germany, the second in Switzerland and in the United States in the case of elementary schools. If in some states of the latter country higher education institutions are also "free", that only means in fact defraying the cost of education of the upper classes from the general tax receipts.”

Marx saw no reason why those who already enjoyed such benefits should be subsidised out of general taxation, which in fact, meant out of the wages of workers, who by and large had no possibility of enjoying those benefits. The argument can, of course, be advanced that the State SHOULD raise the finance to cover these costs by taxing the rich, by taxing Capital. Perhaps it should, perhaps in a post-capitalist society it would indeed be possible to adopt such proposals, or to decide that a proportion of society's wealth should be devoted to making the most of the talents of those who demonstrate such academic proclivities. But, as Marx says, we have to deal with the State we have, not the State we might want. He says,

“The German Workers' party — at least if it adopts the program — shows that its socialist ideas are not even skin-deep; in that, instead of treating existing society (and this holds good for any future one) as the basis of the existing state (or of the future state in the case of future society), it treats the state rather as an independent entity that possesses its own intellectual, ethical, and libertarian bases.

And what of the riotous misuse which the program makes of the words "present-day state", "present-day society", and of the still more riotous misconception it creates in regard to the state to which it addresses its demands?

"Present-day society" is capitalist society, which exists in all civilized countries, more or less free from medieval admixture, more or less modified by the particular historical development of each country, more or less developed. On the other hand, the "present-day state" changes with a country's frontier. It is different in the Prusso-German Empire from what it is in Switzerland, and different in England from what it is in the United States. The "present-day state" is therefore a fiction.

Nevertheless, the different states of the different civilized countries, in spite or their motley diversity of form, all have this in common: that they are based on modern bourgeois society, only one more or less capitalistically developed. They have, therefore, also certain essential characteristics in common. In this sense, it is possible to speak of the "present-day state" in contrast with the future, in which its present root, bourgeois society, will have died off.”

In other words, in a moralistic sense, it might be fine to raise the idea that the present State SHOULD pay for higher education – and many more things besides – by taxing the rich, Capital etc., but as Marx points out there is no reason why a Capitalist State WILL do so, and as he says, to raise demands that it should simply instils in workers the delusion that it might, that it is in some way neutral between classes, rather than the instrument of Capital. He says,

“But the whole program, for all its democratic clang, is tainted through and through by the Lassallean sect's servile belief in the state, or, what is no better, by a democratic belief in miracles; or rather it is a compromise between these two kinds of belief in miracles, both equally remote from socialism.”

Anyone who doubts that should simply look at the fact of how much tax even low-paid workers actually pay, not just in Income Tax, but in VAT, in Excise Duty, in Council Tax, in National Insurance and so on, and the extent to which the truly rich are able to avoid tax almost completely. The fact, that £120 billion is unpaid in taxes is regularly repeated, but it is a situation that has existed for a very, very long-time, and no one seriously believes that any potential Government within the confines of a continuation of Capitalist dominance is going to do anything to seriously change it. As Marx again points out, criticising the idea put forward in the programme that a “single progressive income tax”, could act in some way to redistribute wealth by making the rich pay for the things needed by the poor,

“Taxes are the economic basis of the government machinery and of nothing else. In the state of the future, existing in Switzerland, this demand has been pretty well fulfilled. Income tax presupposes various sources of income of the various social classes, and hence capitalist society. It is, therefore, nothing remarkable that the Liverpool financial reformers — bourgeois headed by Gladstone's brother — are putting forward the same demand as the program.”

In fact, the only reason that Marx and the First International put forward the proposal for a single progressive income tax, was not for such idealistic reasons, but the exact opposite. They raised it so that workers could see by how much the State was ripping them off, and thereby act to limit its expenditure. In the Program of the First International, Marx wrote,

“(a) No modification of the form of taxation can produce any important change in the relations of labour and capital.

(b) Nevertheless, having to choose between two systems of taxation, we recommend the total abolition of indirect taxes, and the general substitution of direct taxes. [In Marx's rough manuscript, French and German texts are: "because direct taxes are cheaper to collect and do not interfere with production".]

Because indirect taxes enhance the prices of commodities, the tradesmen adding to those prices not only the amount of the indirect taxes, but the interest and profit upon the capital advanced in their payment.

Because indirect taxes conceal from an individual what he is paying to the state, whereas a direct tax is undisguised, unsophisticated, and not to be misunderstood by the meanest capacity. Direct taxation prompts therefore every individual to control the governing powers while indirect taxation destroys all tendency to self-government.”

“But, clearly as I point out in that post the situation is different where what we are talking about is not the government machinery, but goods and services – commodities – produced and sold by the State. As I point out there, and as I have argued in Part 3 here, if this production is of commodities, which form a part of the wage bundle that constitutes the Value of Labour Power – and as I have pointed out it does not matter that the commodity healthcare or education is purchased collectively by the working-class, even though consumed individually – then essentially there is no difference than had workers purchased these commodities from any other Capitalist. All we have here is a collective payment for these commodities, in the form of tax paid by workers to the Capitalist State, which provides the contracted service as and when required, just as an insurance company provides the contracted service to get a car or house repaired as and when required.”

What we have, in fact, is the working-class purchasing collectively things such as Education and Healthcare via the taxes they pay to the Capitalist State. There is no deduction from Capital here, any more than when workers buy any other commodity. In fact, to the extent that these commodities are then made available “free” by the Capitalist State, Capitalists tend to obtain them for free, because they are frequently able to avoid paying those taxes. And, precisely because of the advantages they already have, they are able to avail themselves of these free commodities even more. Health services and drugs are more readily available in more affluent areas, the rich can move to where the best schools are, and with all the other advantages they have, their kids are more likely to gain access to the better Universities such as Cambridge and Oxford, providing the same route into the upper reaches of the permanent State machinery and business that they have always done.

To the extent that this taxation does effect any kind of redistribution, it is not a redistribution from Capital to Labour, or even from the truly rich to the working-class, but merely a redistribution from one part of the working-class to another. The better off sections of workers subsidise the less well off via transfer payments of tax and benefits, the less well-off subsidise the better-off via the payment of tax, and subsidies of higher education etc. That is why in all countries, after 100 years of such redistributive policies the effect has been absolutely zero.

Tuesday, 23 November 2010

On Newsnight last night, Paul Mason reported on the economic crisis in Ireland that is now rapidly turning into a political crisis, and a European economic crisis, which in turn may well become a European political crisis. Reading his blog this morning, I see that he is now reporting on the fact that in Ireland, people are talking about a Second Republic. As he says, France has had five Republics, four of them came about violently, and the Fifth and current Republic itself came about as the result of a Coup d'etat in 1959, launched by DeGaulle. Waking up to find the news this morning headed up by reports of artillery exchanges between the two Koreas, and coming on top of minor clashes between China and Japan over claims to islands in the Pacific, I think ist safe to say we are living in increasingly interesting times.

I'm waiting to see Paul Mason's further blog reports setting out the details of his piece on Newsnight last night, but if I got the drift of what he was saying the events in Ireland, and the reason that European leaders have been so keen to force money on to the Irish Government, and why that Government has been holding out - Osborne has admitted that he has actually secretly been negotiating with Ireland and EU leaders for months! - is that Irish Banks have been operating as a kind of money laundering centre for European Banks, circulating money into and then out again of Ireland, to take advantage of differing tax rates. That, of course, illustrates ocne again, not only why we need the books of all the banks to be completely opened, rather than just the sham exercises like the Euro Bank Stress Tests, which happened in the Summer, but why it is ridiculous to try to build a Common Market without having within it, common fiscal as well as monetary policy etc.

The short version of his report was basically, if Irish Banks went down the whole of the European banking system would collapse. Its hard to see that happening without it bringing down US, Middle Eastern and Asian Banks too. That would be a Financial Meltdown several orders of magnitude greater than what we saw in 2008. In 2007, with the start of the Credit Crunch and collapse of Northern Rock, Governments stepped in to reassure savers, and prevent a run on the banks, by beefing up existing guarantees to savers on their deposits. In 2008, after lehman's collapsed, and such runs looked likely to spread, Government's rushed in to provide effectively limitless guarantees of savers deposits in banks. Ireland was the first to step in with such a guarantee, bringing down upon it the ire of its EU partners, who complained that such action was likely to see a flood of money from their banks and into Ireland, and would cause them to have to provide the same guarantees without the policy being commonly agreed. The UK, too introduced a guarantee of up to £50,000 per Bank for savings deposits.

The question now is what is that guarantee actually worth? It was introduced at a time when Governments thought that the chance of anyone every claiming on it was pretty remote. If any Bank failed it would be likely to be a small one, and the options of either the State taking over the Bank, as it did with Northern Rock, and RBS existed, or for the State to encourage and facilitate other Banks to take over the stricken Bank, as they did with Lloyds take over of HBOS, and Santander's takeover of a number of small banks. Rather like the Liberals could promise to vote against any increase in Tuition Fees, prior to an election they had every reason to beleive they would lose, and so it was a promise easily made, but has been just as easily broken having found themselves put to the real test, so the promise to guarantee deposits was easily amde by Government's who thought they would never be called upon to keep it.

Yet, the Ireland events show that even a nationalised Bank such as RBS could be severely tested if the Irish Banks go down, because it is committed itself to the tune of billions of pounds lent to them. Even so, its likely that the State, could stand behind it to prevent such an eventuality, though with Bankers looking to pay themselves bonuses of billions at Christmas, the Tories might have difficulty justifying bailing them out again. However, if the European Banking system collapsed following a collapse of the Irish Banks, could the State fulfil its promise, guaranteeing the deposits of every saver in every Bank - after all anyone with more than the £50,000 limit (£100,000 per couple) will have divided their savings up across a number of Banks - if they go bust, or their is a run on them leading up to such a collapse? It seems unlikely.

And, of course there are lots of precedents for Governments reneging on such promises. The Liberals reneging on their pledge to students is just the latest example. But, the Tories reneged on their pledges made at the election on Tax, on Benefits, on the NHS etc. too. But, in fact such breaking of promises is pretty normal. As I set out in my blog Cut & Run, the State conned people into handing money over to it rather than paying into their own Friendly Societies and so on to cover their needs with the promise of a National Insurance to cover them against Sickness, Old Age, and Unemployment. They had to wait another 50 years before they got the NHS, most of them never lived long enough to collect their Pension - and now they are the State is reneging on that promise by cutting the payments and telling them they have to work longer - and the first time the State was tested in relation to Unemployment, in the 1930's, it responded by reneging on its promise once again by slashing Unemployment Benefit just at the time workers needed it most!!! Who can have any faith whatsoever in the promises made by the Capitalist State? Well, probably on the experience so far, only the Bankers who get bailed out whatever the conditions.

Even Jeremy Paxman on Newsnight, last night, was led to make a similar point. The bankers have shown just how clever they are he commented. Having caused the worst financial crisis in living memory, they are still pocketing billions, by getting the rest of us to bail them out. Even when the capitalist state does take them over it fails to exercise any kind of control over them, let alone introduce any kind of workers' control. The severity of the crisis was illustrated by another point. An economics panel consisting of Will Hutton of the Work Foundation, Gillian Tett of the FT, and irwin Seltzer of the Hudson Institute was assembled to comment on events. Back in early 2009 I wrote in my blog Paying For The Crisis, for millenia, when the State has run up massive debts it has got out of it, by inflation, by devaluing the currency, paying back its creditors with funny money. It would be odd indeed, if State's in that situation today did not resort to the same method. None of them, I wrote could actually say that was what they were going to do, because it would undermine it as a solution, and cause uproar, but that is, in the end what they would do. Last night, every one of this panel agreed. The right-winger, Steltzer, was, in fact, the first to admit it openly. They will inflate away the debt, he said, adding, if you like we can lend you some of our printing presses to print the money to do it.

And, in fact, as I have been saying for months that is exactly what they should do. They should print money to monetise the debt rather than sending these economies into the toilet with austerity measures. Those measures are already having negative effects. Greece has cut its debt ratio by 30%, but that is still less than it was due to have reduced it by. Portugal's debt ration has increased despite the austerity measures. That is before the effects of these measures and a more general economic slowing begin to take effect not only causing deficits to rise again, but reducing the numerator in that equation, the size of GDP. But, it will be no good monetisiing the debt unless other measures are taken to stimulate growth, and stabilise economies. That would not at the moment require huge fiscal stimulus measures, as the Japanese found themselves having to implement during the 1990's after they had let things slip too far. It does mean an end to the Cuts, and the implementation of some targeted stimulus to restore consumer and business confidence. But, time is a crucial feature here. The worse things become the fewer alternatives there are, and the greater the size of the interventions required to put it right.

As Steltzer put it last night, we are not talking inflation on the scale of the Weimar republic here. Not yet. But, if the course is not changed soon the alternative will be either a Great Depression, or a Great Inflation, similar to the Weimar. Worse of all, could be the onset of a Great Depression causing a large scale deflation, that prompts a massive inflation as a response.

Monday, 22 November 2010

Its still not clear what the actual settlement of the Irish Bail-out will be. But, the implications are already being felt. The Irish Labour Party has called for an immediate dissolution of Parliament, and the Green's, who are a partner in the Coalition Government,have called for a General Election by January or else they will leave the Coalition.

In exchanges in the Commons following the statement on the bail-out by George Osborne, it has become obvious that the deep schism within the Tory Party - let alone the divisions between the Tories and the Liberal partners - continue and will be opened up over this issue. The Tories, who have been praising Ireland for the last few years - Osborne having said we should learn lessons from Ireland - and who especially referred to the effects of the irish austerity measures are in a jam. Nearly all economic analysis coming out now, shows that the effects of the Irish Government's austerity measures will be to send the Irish economy into recession. In a similar vein, a commentator on CNBC today, commenting about Portugal, said that its problems were different. Its Banks were relatively sound, but its economy suffered from low levels of productivity and competitiveness. The austerity measures in Portugal, he argued could easily send it into a death spiral where lower growth sent the deficit higher. But, the truth is that the Irish economy has been built on a sham too. It was not high productivity, and low corporate tax rates that were behind the irish growth story, but high levels of debt financing a property bubble, and the construction industry that fed off it. That in turn fed a growth of the retail and otehr service sectors of the economy.

But, the issue of the Corporation Tax is another example of the problem the Tories face. Northern Ireland MP's, asked the obvious question - why should Northern ireland taxpayers bail-out the Irish banks, and the Irish state, when in Northern Ireland the Corporate Tax Rate is 28%, whereas a few yards across the border the rate is only 12%? This goes to the heart of the problem of the EU. A Common Market can only work if there are common tax rates across it i.e. if alongside a single currency, and a single Monetary Policy there is a single fiscal policy, a single set of Benefits rules and payments etc. The Tories want to oppose any closer union, but the reality is that the EU can only succeed if that closer union is created i.e. a single EU State. The idea that its right for the UK to make a bilateral bail-out to Ireland because of its importance to the UK economy applies with equal force to the EU as a whole. Britain might export more to Ireland than to China, Brazil, Russia and India combined, but it does not export more to Ireland than it exports to the rest of the EU!!!

Challenged by Labour to recognise that the real lesson of Ireland was that what was needed was measures to stimulate growth, not austerity, Osborne showed the same kind of separation from reality as his Irish counterparts were demonstrating last week. In none of his discussions with other Finance Ministers, he said, had it been suggested that what was required was a less tight fiscal position. Really? So why then has Obama, and the rest of the US Government been imploring European leaders to boost demand in their economies for the last year??? Why is it that economists from Right to Left, from Roubini to Stiglitz have been warning that austerity measures would send the world into a deep recession?

None of the Opposiiton, however, asked Osborne the obvious question. The Liberal-Tory plan is premised on the idea that cuts in the Public Sector will be made up by growth in the Private Sector, premised on the idea that British Exports will grow at a rate far higher than they have been able to do in decades. How on Earth, given that Ireland is going to go into recession, that austerity measures in the UK's other main trading partners in Europe will have similar consequences, is that even likely to occur. To pull that off would be a harder trick than turning water into wine, which is the kind of miracle that some of these economies are likely to depend on as part of their tourist trade.

Meanwhile, across the pond the Financial Crisis is manifesting itself in other forms. CNBC, quoting the FT, has a story that says that following the Basle III Accords, on trying to ensure that the Banks are adequately Capitalised, US Banks will be anything from $100 billion to $150 billion short, according to analysis by Barclays Capital. And typical to similar periods in history when financial crises have brought all other sorts of shenanigans and malpractice out of the woodwork, they also report, that Federal Authorities are close to filing a string of Law suits against major Wall Street firms and individuals over insider trading. Here .

In short, the climate is beginning to develop once again of fear that led to a reluctance to lend, which preceded the Credit Crunch. One of the main reasons that is occurring, is because the policy measures introduced in the intervening period have failed to create the kind of economic growth, which would itself have generated an increase in deposits, and cash flow that would have then financed further growth. Until such policies are put in place the crisis will not go away. On the contrary, all the signs are that policy errors are being compounded as they were at the beginning of the Great Depression, and a similar outcome may result.

Sunday, 21 November 2010

Ireland has eventually faced reality and formally asked for financial support from the IMF and EU. It was only a matter of time. It looks like they will get 15 Billion Euros to go to the State, and 80 billion Euros to go to bailing out the banks, or around 100 billion Euros in total. Most of this will probably come from the 750 billion Euro EFSF set up in the Spring, when the sovereign debt crisis erupted around Greece. Ireland is now the second domino to fall, and the hope of the EU is that this will provide a firebreak to prevent the next domino in the chain Portugal from falling. It seems a vain hope.

As I pointed out a couple of years ago when the Financial Meltdown began Where We're Going,

“The problem that could arise given the scale is that the same causes of breakdown of trust and relations between Banks, which led to the Crunch could simply be transferred to the relations between States now acting as banks. We have already seen that to some extent. It was seen over the actions of the Dutch, Belgian and Luxembourg governments over Fortis. It was seen in the scramble for advantage when Ireland stepped in to guarantee all Bank deposits, threatening a stampede out of deposits in other EU countries. Most classically, it has been seen in the conflict between Britain and Iceland over deposits in Icelandic banks, and which was reminiscent of the 1970’s Cod War. It is certainly the case that some of these banks such as UBS of Switzerland have Balance Sheets bigger than the GDP of their host nations.”

We now have a zero-sum game in much of the global economy. Traders rarely make single bets. They usually work on the basis of what are called "paired trades". That is if the risk/reward ration for one thing has improved whereas for something else it has worsened, then they buy the former, and "pair" this trade by selling the latter. In that way, gains are maximised, and losses minimised. When Northern Rock was nationalised, it became one of the safest places to put your money, because all of its deposits were now guaranteed by the State. When Greece was bailed out, and its need to go to the Capital Markets pushed down the road, by its bail-out, the focus was shifted to the next country that lacked that facility – Ireland. Capital began to flow out of Ireland to the extent of 23 billion Euros, and was likely to increase. Depending on the nature of that settlement, pressure will be relieved from Ireland and be transferred to Portugal. It seems likely that this same procedure will be played out again, and then next in line will be Spain. If I were a Bond Trader, then as soon as it became obvious that Ireland was to be bailed-out last week, I would have been selling Portuguese debt across the yield curve, and possibly Irish Debt at the Longer end, and buying Irish debt at the short end of the curve i.e. Bonds due to mature in the next couple of years. The reason is simple. With the bail-out, Ireland will have no need to go to the market for the next couple of years. That alone means the Supply of short-dated Irish Bonds will fall, and the price will rise accordingly. Moreover, the bail-out means that there is no possibility of default on those short-dated bonds, meaning the risk has disappeared, and with it the risk premium on them. By contrast, Portuguese Bonds have become relatively more risky at all maturities. If the EU has to cover the lending to Greece, and Ireland through the EFSF, by borrowing istelf, then this debt coming to market at some point, will be very secure, and if I were a Bond Trader I might want to keep some reserves to pick up that debt. Finally, having seen that if the Bonds of a country are trashed enough the EU will come in to bail-out that country, thereby removing the growing risk that bondholders were feeling - particularly after Merkel's comments - then there is a massive incentive for Bond Markets to trash the next country in line, in order to force the EU to come in, and back-stop that risk.

I would expect that next week we will start to see already that the spread on Irish Bonds will narrow, and on Portuguese Bonds they will widen.But, none of this provides any real solution, in fact, it compounds it. We have had 750 billion set aside in the EFSF, we have had a large chunk of that set aside for Greece, now we have another 100 billion set aside for Ireland, the figure for Portugal is likely to be a similar amount. The trouble is, a hundred billion here, and another hundred billion there, before you know it, you're talking about serious money! And that serious money is being drained from one pot only to temporarily fill another. The real solution is not to rob Peter to pay Paul, but to create more value in total. The trouble is that creating more value in the context of an economy needs an approach that is rather more sophisticated than the attempt to apply the principles of running an household budget that the Tories and the Right-Wing Populists want to use.

There are two basic things required. Firstly, the debts have to be monetised. In other words, the EU, just as with the UK and the US (the US has already been doing this with QE), has to print money to pay the creditors. Households can't do that without risking being sent to gaol for forgery, or passing a false instrument. But, printing money itself is not a solution. Paper Money itself is not Value, it is only a representative of Value contained in the Money Commodity – usually Gold - which itself can only circulate as value within the economy to the extent that it can exchange with equivalents. That is, real value is created by increasing the quantity and value of commodities circulating in the economy, more cars, TV's, machines and so on. In a Capitalist economy that only happens when the Capitalists believe they can make profits from doing so, a basic condition for which is that there is adequate demand for those commodities. The only point of the money printing is to work towards this latter requirement. By clearing the debts in the short term, it provides the basis for Money and Credit to circulate in the economy. But, that will only happen if people are confident to spend on consumer goods, which in turn creates confidence for firms to invest. At the moment that is unlikely because Governments like the Tories or their equivalents such as the Tea Party in the US, have scared the shit out of people with their narrative about how bad the situation is, how imminently devastating the deficit is, and how much pain people will have to suffer with Cuts and job losses as a response. The exact opposite is required, and without it, the consequences could be far worse than the picture the Liberal-Tories have been painting.

The fiscal stimulus that the last Labour Government had implemented was beginning to have the desired effect. Unemployment had not risen as much as the pundits were predicting, people were not being thrown out of their houses, and so on. Growth in the economy had started to increase, and as a result the deficit was actually lower than had been anticipated as taxes were higher and welfare payments lower. The same effect could be seen from the fiscal stimulus introduced in the US, in Brazil, in China, and elsewhere. What was actually required was a continuation of that fiscal underpinning of the economy to allow it to gain strength. Then the measures could be put in place to ensure that fiscal responsibility was restored under the more benign conditions of economic growth, and further measures could be introduced to encourage investment in those areas which offer the greatest potential for future development and competition.

What is standing in the way of that is right-wing ideological dogma. As I quoted recently a right-wing commentator in the US summed it up when he was discussing the demands of US Big Business for socialised Healthcare, and the resistance such a rational solution faced:

“The bigger hurdle may be stereotypes. Business's sensible drive to get Uncle Sam to take on more of the health burden will run into the nihilistic (but potent) "big government" rhetoric of the GOP--plus the party's delusion that we can keep federal taxes at 17% to 18% of GDP as the boomers retire. If Republican pols want to help Republican CEOs solve their biggest problems, this caricature of a political philosophy will have to give way to something more grown-up.”

The problem is that popular opinion is rather like an oil tanker, it does not turn on a sixpence. Years of neo-liberal propaganda have conditioned people into the belief that the State is bad, that there has to be balanced budgets and so on. Politicians such as those Miller is referring to, who have to get elected, cannot simply come out and change course if they want to get elected. The example of what has happened to Obama, is a clear illustration of what happens when they do.

As a consequence the domino's are likely to continue to fall, and each one will create a more deafening thud as it lands than did the last.

Vince Cable was interviewed by John Sopel on today's "Politics Show" on BBC1. He was asked if the Liberals had betrayed their pledge to vote against rises in Tuition Fees. His reply was the biggest load of bollocks I've heard in a long time.

Cable said, no we haven't betrayed that pledge, because we didn't win the election, and we have had to compromise on some of our commitments. But, this makes no sense whatsoever. The commitment that the Liberals gave was not, "If we win the election we will vote against any increase in Tuition Fees", but simply we will vote against any increase in Tuition Fees!!! In fact, it would not have made sense to have a commitment to vote against any increase in Tuition Fees had they won the election, because they would have been the Government, and they presumably would not have been bringing forward any such proposal to vote against! And, although the Liberals always go through the fantasy at election times of pretending that they have as much chance as anyone else of winning, every sensible person, and come to that even every Liberal, knows that they do not. When they made that commitment, and repeated it in numerous TV appearances, in signed pledges and so on, it must have been on the basis of assuming that they would NOT win the election. What has changed for the Liberals here is not that they made a pledge whose fulfilment depended on winning the election, but like all other Liberal policies is the fact they can make all kinds of rash promises on the assumption they would never have to implement them, but have now found themselves in Government, and called to account!

Cable says, we had to compromise commitments as part of the Coalition agreement, but the Coalition Agreement was not something that they HAD to enter into. And as part of those negotiations did the Liberals not have a responsibility to insist on the right and necessity of them sticking to those very commitments that they had sworn a solemn oath to, and which in many seats was the only basis on which they got their candidates elected? The Liberal-Tories have made great play about the need for honesty and trust in Government, but they have shown very little commitment to either in the last few months. They promised the right of electors to recall their MP's where such honesty and trust was breached. We should demand that be put into practice and that we have the right to recall all MP's who no longer have the support of their electors.

Saturday, 20 November 2010

Northern Soul is a working-class cultural phenomenon. It started in a number of clubs like the Twisted Wheel in Manchester, The Golden Torch in Stoke, The Catacombs in Wolverhampton, The Dungeons in Nottingham, and many more, in the mid 1960's, before it was even given a name. It was based on a particular type of soul music that was conducive to an energetic style of dancing that comes out of similar US dance styles, going back at least to the 1940's. The term Northern Soul was probably first used by Dave Godin, in 1970, in the magazine “Blues and Soul”, which was like a house journal for anyone interested in the music at the time. It was used to distinguish the particular type of music played in these Northern clubs, from the more mainstream soul music that tended to be played in southern nightclubs.

I first started going to the Golden Torch around 1967-8, before it was even fully a “Northern Soul” club. At the time, during the week, it played a range of music including reggae, which catered for the large number of skinheads who attended. From the start, the vast majority of people who were involved were working-class, and the music, the dancing and culture were ours. By the late 1960's, and into the 1970's, the number of clubs had proliferated. Everywhere you went, youth clubs were playing Northern at the week night discos. Mainstream venues in the North, like the Top Rank began to convert their Saturday night discos to Motown and Northern. The Torch had taken over the mantle of the Wheel, when it closed, and similarly, when the Torch was closed down, in 1973, having started the phenomena of the “All-Nighter”, the mantle was passed to Wigan Casino, which became the epitome of Northern Soul. Its reported that on a hut part way up Mount Everest, someone has written “Wigan Casino rules”! Instead of dying out with the increasing age of those of us who were there at the beginning, it has continued to grow. New generations have now been recruited, and there are northern soul clubs all over the world.

Its almost impossible to define what makes a particular record Northern Soul, because it varies from the very slow to the very fast etc. Some of what passed for Northern was not soul music at all. In order to know it, you have to hear it, and these posts are designed for that purpose to spread knowledge and understanding of this important working class cultural phenomenon.

This index is organised in alphabetical order of artist, with a separate miscellaneous section covering a number of videos about the genre.

About Me

Left school at 16. Became an ASTMS shop steward at 19, and a lifelong trade union activist. Delegate to North Staffs Trades Council 1974-87. Secretary North Staffs Miners Support Committee 1984-5. President North Staffs Trades Council 1985-6 and 1986-7. Delegate to Staffordshire Association of Trades Councils 1985-7. Delegate West Midlands Regional Council of the TUC 1985-7. Secretary Newcastle UNISON 2000-2.
Member of the International Communist League/Workers Socialist League 1974-87.
Went to University as mature student at age of 24. Obtained Joint Honours Degree in Economics and Politics with Philosophy and Statistics, followed by a Post Graduate Certificate in Education.
Labour Party member since 1974. Stoke City Councillor 1983-4, expelled from Labour group 1983, and resigned from Council in 1984 because of refusing to vote for rent and rate rises, and budget cuts. Staffordshire County Councillor 1997-2005.
Assistant Secretary Stoke District Labour Party 1981, and held pretty much every position from Executive member, to Branch Secretary, and Branch Chair.